May 8 (Bloomberg) -- SouFun Holdings Ltd. and PetroChina
Co. dropped, pushing an index of Chinese stocks in the U.S. to
the cheapest level in more than a week, on concern a housing
slump and sliding oil will hurt company earnings.

The Bloomberg China-US Equity Index of the most-traded
Chinese shares in the U.S. lost 0.1 percent to 101.85 in New
York, the lowest close since April 25. Property website owner
SouFun fell to a two-month low, while PetroChina, the country’s
largest oil producer, tumbled to the least since April 16.
Aluminum Corp. of China Ltd. traded at a premium to its Hong
Kong stock after its parent was asked to help the government
consolidate China’s rare earth industry.

Companies in the China-U.S. gauge trade for an average 17.5
estimated earnings, the lowest since April 26 and compared with
an average multiple of 19 over the past three years, data
compiled by Bloomberg show. Crude oil slid to the lowest level
this year in New York and Industrial & Commercial Bank of China
Ltd. suspended a discount on mortgages for first-time home
buyers nationwide, the Xinhua News Agency reported on May 5,
raising concern housing sales may be undermined.

“The valuation is about as cheap as we can get for
China,” Jim Oberweis, who oversees $800 million as president of
Oberweis Asset Management Inc. in Lisle, Illinois, said by phone
yesterday. “You want to be more selective, looking for
companies with higher margins and higher growth,” including
some consumer stocks, he said.

Of the 55 companies on the China-US measure, 27 rose
yesterday, while an equal number of shares declined. The index
has lost 4.6 percent from a six-month high of 106.74 on March
13. The Standard & Poor’s 500 Index was little changed yesterday
at 1,369.58.

China ETF Drops

Option traders are turning the least bearish on the China
ETF in more than two months. The open interest of puts, or
rights to sell the ETF, was 1.43 times calls, or options to buy
it, on May 1, according to data compiled by Bloomberg. That was
the lowest put-to-call ratio since Feb. 21 and compares with
1.22 at the end of 2011.

Spreadtrum Communications Inc., a Shanghai-based mobile-phone chipmaker, rose 5.7 percent yesterday to $16.34, the
highest in three weeks. The company said in a statement that it
was picked by HTC Corp, a Taiwanese mobile phone maker, to
supply baseband modems and transceivers for its smartphones in
China.

HSBC Holdings Plc. raised the company to overweight from
neutral while Daiwa Securities Capital Markets Ltd. boosted its
recommendation to buy. Spreadtrum jumped 15 percent on May 4,
the biggest one-day advance since May 2010, after forecasting
second-quarter sales that beat estimates and saying that it will
ship new smartphone chips ahead of schedule.

Chalco Rises

Aluminum Corp., known as Chalco, rose from a four-month
low, gaining 3.5 percent to $11.81. Chalco’s parent company,
Aluminum Corp. of China, was asked by Su Bo, China’s vice
minister of industry and information technology, to accelerate
consolidation of the country’s rare earth industry and move
toward setting up a rare earth group, according to a statement
on the company’s website yesterday.

The ADRs traded 0.7 percent higher than the company’s Hong
Kong shares, the first premium since April 27.

Chinese and Israeli technology firms, the biggest source of
foreign listings on the Nasdaq Stock Market, will boost share
sales this year to capitalize on the best gains since 1999, Bank
of New York Mellon Corp. said.

Chinese IPOs

As many as eight Chinese technology companies and six
Israeli tech and biotechnology developers are planning initial
public offerings by listing depositary receipts on the Nasdaq
and the New York Stock Exchange in the second half of 2012, said
Anthony Moro, the head of emerging-market depositary receipts
for BNY Mellon in an interview. The Nasdaq Composite Index has
gained 13.5 percent in 2012.

SouFun Holdings Ltd. lost 3.6 percent to $17.1, the lowest
level since March 6.

Industrial & Commercial Bank of China Ltd., China’s largest
lender, notified borrowers that it would scrap a 15 percent
mortgage rate discount for first homebuyers last week, the
official Xinhua News Agency reported on May 5. The decision,
made primarily to address a cash crunch and “deposit
instability,” may be followed by the other large Chinese banks
including China Construction Bank Corp. and Bank of China Ltd.,
according to Religare Capital Markets.

GDP Growth Slows

China’s gross domestic product grew 8.1 percent in the
first quarter, the slowest pace in more than two years, as the
housing market cooled and the export growth slowed. A government
report expected this week may show exports grew 8.5 percent in
April from a year earlier, compared with 8.9 percent in March,
according to the median estimate of 32 economists surveyed by
Bloomberg. Exports grew an average 21 percent last year.

“My feeling is the news is going to continue to worsen,
and markets are more likely to go down than go up,” Michael
Shaoul, chairman of Marketfield Asset Management in New York,
said by phone yesterday. “At some point in time, we’ll stop
talking about a soft landing and start talking about something
worse.”

Shaoul’s Marketfield Fund, which has $445 million in
assets, gained 7.6 percent this year, beating 83 percent of its
peers, data compiled by Bloomberg show.

PetroChina, Cnooc

American depositary receipts of PetroChina lost 1.1 percent
to $142.89 after crude for June delivery touched $95.34, the
lowest intraday level since Dec. 20.

The decline in the oil company’s ADRs compared with a 3.4
percent drop in its Hong Kong stock. That left the ADR to trade
1.2 percent higher than its equivalent in Hong Kong, the first
premium since April 26, according to data compiled by Bloomberg.
Cnooc, China’s largest offshore oil producer, dropped 0.8
percent to $207 in the U.S.

Of the 18 companies in the China-US index that have
reported earnings since April 10, nine have fallen short of
analysts’ forecasts, including Yanzhou Coal Mining Co. and China
Telecom Corp., data compiled by Bloomberg show.

Ten companies in the China-US index are expected to release
first-quarter results this week, including Melco Crown
Entertainment Ltd. and Home Inns & Hotels Management Inc.
according to data compiled by Bloomberg.